2016 - 2017 Benefits

1. 2016 - 2017 Benefits Presented to: School District of Cambridge May 11, 2016 Presented by: Allen J. Jaeger, CEBS Senior Vice President, Senior Benefits Consultant Associated Financial Group Associated Financial Group Employee Benefits. Insurance. HR Solutions.

2. Agenda Health Plan for 2016 - 2017 Health Savings Account (HSA) Changes to the FSA Plan Dean Health Plan Being a Better HealthCare Consumer Delta Dental Plan

3. Dean Health Plan Renewal Options Renew plan “as is” with no plan design changes Switch plan to a Health Reimbursement Arrangement (HRA) with a $2,000/$4,000 deductible Switch plan to a High Deductible Plan with a Health Savings Account. New deductibles would be $3,000/$6,000

4. Renewal Rates

5. Comparing Plan Options Renew plan “as is” - $207,000 increase to District budget, increase to employee’s contribution $108/$245, no incentive to become better consumers Switch plan to H.R.A – 1.78% savings before District contributes to funding, decrease in employee’s contribution $12/28, more hassle/work for employees, no incentive to become better consumers Switch plan to H.S.A. – 22.39% savings before District contributes to funding, decrease in employee’s contribution $203/$461, incentive to become better consumers

6. Rationale for choosing High Deductible/H.S.A Reduce employee contributions Eliminate co-pays Money not spent in H.S.A. remains with employees and can accumulate – Advantages over current Flex Plan Employees can make contributions to H.S.A on their own Potential to change medical trend experience District contribute $2,000 for single plans and $4,000 for family plans. This contribution results in 4.42% increase above 2015-16.

7. Key Points to consider Contributions made on a quarterly basis – July, October, January and April Biggest Challenge – Expensive Rx that need to be purchased early in the fiscal year. Option for a hardship provision Account is created for each employee. Once money is deposited in account it’s the employee’s money. If employee doesn’t have $2,000/$4,000 worth of expenses balance carries forward. After a year or two it’s possible for no out of pocket cost to employee Responsibility of employee to access money for only for qualified medical expenses Preventative Care Services – No cost to employee for yearly physicals, preventative procedures (mammograms, colonoscopy, etc.) and some Rx drugs.

9. 2016 2017 Employee Health Plan Contributions Effective July 1, 2016 HMO Plan Deductions On a Monthly Basis (current actives) POS Plan On a Monthly Basis (current actives) Savings would be much greater if compared to renewing rates

10. Don’t Let $6,000 Deductible Scare you – Here’s how the math works (comparing to renewing rates)

11. Protects you from high costs • Coinsurance similar to traditional plans • Out-of-pocket maximums are in place for added peace of mind • Resources and tools • Dean Customer Care at 800-279-1301 • www.deancare.com • Obtaining info from local H.S.A. Bank 100% Rx Copays • Option to reimburse from this account • HSA funds are used for eligible expenses. Preventive care covered at 100% • Amount that needs to be satisfied before health coverage begins • Preventive care not subject to deductible The HSA Plan Components Preventive Care HSA Annual Deductible $3,000/$6,000

12. HSA Overview

13. HSA Overview • The purpose of the Health Savings Account • Save for immediate medical expenses • Save for future medical expenses • Save for retirement expenses, including Medicare

14. ADVANTAGES OF AN HSA

15. Protects you from high costs • Coinsurance similar to traditional plans • Out-of-pocket maximums are in place for added peace of mind • Resources and tools • Dean Health Plan contact information. • Bank’s Client Assistance Center at (confirming) 100% After Deductible • Option to reimburse from this account • HSA funds are used for eligible expenses. Preventive care covered at 100% • Amount that needs to be satisfied before health coverage begins • Preventive care not subject to deductible The HSA Plan Components Preventive Care HSA Annual Deductible $3,000/$6,000

16. Tax treatment of HSAs 15 • Contributions • Payroll contributions are deducted from your federal taxable income. • Individuals in the state of CA, AL and NJ are subject to state taxes. • Post tax contributions are tax deductible when you file your tax return. • Earnings • HSAs grow in the same tax-deferred manner as IRAs. • Distributions • Withdrawals for qualified medical expenses are tax-free. • Before age 65, funds withdrawn for non qualified medical expenses are penalized at 20% and considered taxable income. • After age 65, funds may be withdrawn for any reason without penalty but considered taxable income.

17. Who is NOT eligible for an HSA? Individuals are NOT eligible if they are: 16 • Covered by any other non HSA-compatible health plan Traditional health plans, Full FSA, HRA, Tricare and/or VA benefits • Claimed as a dependent on another person’s tax return Excluding spouses per Internal Revenue Code • Enrolled in Medicare / Tricare

18. Qualified medical expenses 17

19. HSA distributions

20. HSA eligible medical expense auditing 19 • Unlike Flexible Spending Accounts (FSAs), HSA custodians (HSA Bank) are not required to determine whether HSA distributions are used exclusively for eligible medical expenses. • Individuals determine if expenses are qualified and should maintain records of expenses. • Explanation of Benefits (EOB) • Receipts • Invoices

21. How Do I Use My HSA with my HDHP? SubmitClaim Pay provider Pay Pharmacy Fill prescription 20

22. PRESERVE YOUR HSA DOLLARS • STAY HEALTHY or GET HEALTHY • Use In-Network doctors/hospitals – shop around • Know your benefits • Consider generic or mail order prescriptions • Ask doctors and pharmacists questions • Most effective treatment • Cost of treatment • Alternatives to treatment

23. Processing claims • Don’t pay your doctor immediately after your office visit. • Your insurance carrier will review your health insurance plan, and apply applicable discounts to your bill. 22

24. Processing claims • After the insurance company has reviewed your bill and health plan, you will receive an updated billing statement showing the true cost due. • All discounts have been applied, now is the time to pay your bill. 23

25. Ways to Be a More Cost Conscious Consumer of HealthCare

26. www.deancare.com • Find a Doctor or Location • Prescription Drug Information • Customer Care Access • Transparent Pricing • DeanConnect • MyChart • Authorization Process • HMO Member Handbook • Living Healthy Program • Well-Being Assessment (WBA) • Special School District WBA Rewards • Wellness Tools & Trackers • Discounts at Local Health & Wellness Retailers • Dean On Call 24/7 Nurse Line • Quite for Life Smoking Cessation Program • Tips for Managing Your Health

27. Special School District Member Page at www.deancare.com

28. Living Healthy Portal

29. Smart Shoppers!

30. HealthCare Choices School

31. $4 Rx Programs

32. Changes to FSA Plan July 1, 2016 • Changing to an HSA high deductible health plan changes the type of Flexible Spending Account (FSA) plan sponsored by the District • Currently, the District offers a “full” FSA plan to those on or off the district health plan. • With the new HSA HDHP, the FSA changes to a “limited use” FSA plan for those on the health plan. What does that mean to you? • Can use FSA for qualified vision and dental expenses • Cannot use FSA for other medical expenses

33. No change to benefits • NO change to monthly employee contributions: • Website capabilities: • Check eligibility, benefit information • Determine claim status • Access oral health information • Find network dentists • www.deltadentalwi.com Delta Dental Plan

34. Action Steps • Watch for H.S.A. paperwork and contact information • Complete and return H.S.A. paperwork by May (?) to Business Office to start receiving your deposits (July 1 is first deposit date). • Sign up for DeanConnect, MyChart, and WBA at www.deancare.com. Contact Dean Customer Care at 800-279-1301with any questions. • Local Bank Contact Information: Nicole 608-423-3226 • Next Steps: * Fees will be waived for staff if they elect eStatements. If you wish to have a paper statement mailed to a $2 monthly maintenance fee will apply.

35. Questions?